Good Will Blogging
How do you like them apples...

Listening to @siracusa’s podcast, he prescribes an interesting solution to the problem he perceives with OS X moving to a yearly update schedule: Intel’s tick-tock model.

It certainly seems to fit with Apple’s behaviour in recent years.

Exhibit A: iPhone

The iPhone 3G, a big update to the original iPhone, was followed by the relatively modest 3GS. It had an identical external design, and even its name acknowledged that it was intended as a better iPhone 3G.

The next update, iPhone 4, was clearly a “tock” — radically new design, and big improvements across the board. And again we saw the “tick” as iPhone 4S, similar to iPhone 3GS in both the magnitude of changes and the naming. iPhone 4S is an iPhone 4, plus an S. It is the iPhone 4 that has become logistically practical to manufacture in 2011/12.

Exhibit B: iPad

Okay, we haven’t actually seen the third episode in the iPad saga yet, but I’m convinced it will be a “tick” — a refinement on the current iPad 2 design.

Certainly the iPad appears to be following the same pattern as iPhone for its first two designs. We shall see.

Exhibit C: Mac OS X

As Mr Siracusa points out, Snow Leopard was a functionally minor increment over Leopard, as Apple focussed most of its resources on stability, performance, and architectural improvements.

What he didn’t mention, unless I missed it, was that its name was an increment of its predecessor. Just like the iPhone 3GS, just like the iPhone 4GS.

And here we are again, with Mountain Lion. If I’m right, its name intentionally signals a “tick”, meaning it is intended to be a better Lion. If I’m right, we can think of 10.8 as “Lion S”.

From what I’ve seen of it so far, it does appear to be functionally minor. The headline features touted on Apple’s teaser page are almost all existing features of iOS, so really, there isn’t much new design work there. Think back to Snow Leopard — it wasn’t completely devoid of new functionality; there was actually quite a lot. I think Mountain Lion is approximately on par with Snow Leopard in terms of the visible stuff.

All of this is meant to support the case for 10.8 as a big stability and performance release in disguise. Is this wishful thinking?

The next iPad will not be iPad 3. It will be iPad 2S.

Apple has established the pattern already with iPhone: after the original iPhone, there was a significant external hardware design change in the second generation, iPhone 3G. The third generation iPhone retained the exact same external hardware design as the second generation, and got the name “iPhone 3GS”. This was repeated with the new design of iPhone 4, inherited by the iPhone 4S.

The first generation hardware was not repeated, and served almost as a prototype. From the second generation, the hardware design lasts two product cycles — two years.

I would not be the first to speculate that this is related to the costs of manufacturing machinery and processes. Apple sees its competitive lead as being more than 2 years anyway, so why waste resources re-tooling its plants every year?

So far, the iPad seems to be following the same pattern: the second generation got a significant external hardware design change. Apple’s product naming strategy for iPad may differ from iPhone, meaning Apple may choose to name the next iPad “3”, but I predict the external hardware design will be exactly the same as iPad 2.

Note that this does not discount the possibility of a Retina Display. A double-resolution display does not affect the external design. It will certainly require different internals, but I’m only talking about the external design here — both the iPhones 3GS and 4S had huge internal upgrades.

So here are my predictions for the next iPad, just for fun:

• Name: iPad 2S.
• Form factor: Exactly the same as iPad 2.
• Screen: 9.7-inch diagonal; 2048 x 1536 resolution at 264 ppi. (This will qualify as “Retina Display” by way of typical viewing distance.)
• Storage: 32 GB, 64 GB, and 96 GB.
• Chip: Next-gen (“A6”?) dual-core SoC; improved graphics.
• Cameras: At most, a modestly improved rear camera.
• Software: Siri support; a point upgrade to iOS, probably “5.2”; more iCloud-based features; and at least one new feature that doesn’t work outside the US.
• Release date: 16th March, 2012.
• Price: USD $499 for 32 GB WiFi model; $829 for 96 GB WiFi + 3G model.

UPDATE: Since iOS 5.1 still hasn’t been released, I expect it will with the new iPad announcement. Also, it looks like the new chip will be named “A5X”, which leads me to think the name of the new iPad will be “iPad 2X”.

On his podcast with Dan Benjamin The Talk Show, episode #68, John Gruber said, of the way he views the Kindle Fire’s competitive position relative to the iPad:

The Fire is way more interesting, because it’s not an iPad rip-off. I mean, clearly it’s following the path that the iPad blazed in terms of basic form factor, and that the key to tablet computing is touch-based interfaces. It’s not the previous Microsoft style of styluses and full Windows operating system.

He’s right, of course, but what I anticipated him to say was, “The Fire is clearly sailing in the iPad’s wake, but that’s not to say they’re copying iPad.”

The truth is, as everyone knows, Apple didn’t invent the tablet computer. Microsoft didn’t invent it either, but they were the first to bring an actual product to market (AFAIK) with the Windows Tablet PC.

But the Tablet PC didn’t catch on. It didn’t leave a wake for others to follow. To stretch the boating metaphor, it was like a cargo ship scraping its hull on in too-shallow water.

The iPad followed the Tablet PC’s path, but it sails in deeper water — water that wasn’t there before. Apple brought the ocean.

And now the ocean is there, the Kindle Fire has an ocean to sail in. What we haven’t found out yet is, are they another boat in iPad’s wake, or just waterskiers?

Later in the podcast, Gruber makes the point that quite possibly zero people who have bought a Kindle Fire were first-time Amazon customers:

That you can say, ‘Look, if you trust us, and you already have an account with us…’ And I can’t help but think that almost everybody… I mean how many people do you think have bought a Kindle Fire, who didn’t already have an Amazon username and password? I mean, maybe zero! It might literally be zero people who’ve done that.

Thinking about what makes the Kindle Fire the first credible competitor to the iPad, it occurs to me that Amazon and Apple both have an immeasurably valuable asset to their names: millions and millions of credit cards.

Once a company already has your credit card details, it is so much easier for them to get you to give them money. This is obvious, but to finish the point, the user experience of entering credit card and shipping address details is long and painful. You have to type a lot of personal details into the website of a company you just met, and any mistake might mean you don’t get what you want, or worse, lose some money.

To flip it over, the point is that every account they have, with credit card details, is an expression of trust from the customer. Credit Card = Trust. You are already in business together. The asset that both Apple and Amazon have is the trust of millions of people.

And it’s all about trust. Amazon was the first truly successful retailer on the Internet. They basically invented online commerce. They had to invent a lot of the technology that allows us to use credit cards — a hopelessly insecure technology conceived in simpler times — on the new world of the Internet. When it comes to using credit cards online, Amazon brought the ocean.

Apple started building its stockpile of credit card accounts much later than Amazon, with the iTunes Music Store. And they leveraged the trust they had earned from making stuff that “just works” to add more accounts with the App Store. Steve Jobs quoted the number of accounts a few times in keynotes, particularly at WWDC, to encourage developers to write more apps, which sold more iPhones and iPads, which got them still more credit cards. This feedback loop has generated a great foundation for Apple to sell things to people, and it’s probably not even 10% of Amazon’s credit card accounts.

If credit cards are a proxy for trust, or at the very least a gateway for digital commerce, then what other companies have this? Seriously — who else has as many credit cards on file as Amazon and Apple? Nobody, right? Certainly not Google, and probably not PayPal, either.

If you stop and think about that, it implies a potential for almost all digital commerce to go through Amazon and Apple. That’s an incredible prospect. And it’s why I expect Apple to enter the market for ad-hoc payments. Maybe NFC, maybe something like Square, maybe something more like EasyPay, maybe something totally different.

But no company can do that without Trust. So the only question is, will it be Apple or Amazon?

I’ve let this subscription stuff swirl around in my brain for a week or so while reading the arguments on various sites. There have been a few really well-thought-out articles, but I feel there is an important point that’s either missing or way under-represented.

All of the opinions I’ve read seem to focus on what it does to existing business models. But there has been very little focus on what new business models are now possible, that were impossible (or at least difficult) before.

For example, until now, a feature writer had I guess two options to make a living: an ad-supported weblog, and/or syndicated writing for a magazine, newspaper or website. But now there’s a third option: make an app that delivers your writing to paying subscribers.

I, for one, would happily pay for a subscription in a Daring Fireball app.

Of course, it’s not only writing that could take advantage of this business model. Imagine, a photographer delivering her work to paying subscribers, a language-learning app that delivers lessons, even a special-interest club that uses the subscription payments system to collect membership fees.

And the important thing is, this model is now available to anyone at any scale. The size of Apple’s 30% cut is largely irrelevant for people who didn’t have a viable business model before this. Getting 70% of something is better than getting 100% of nothing.

The App Store did this first. How many iOS developers out there now find themselves in a new career, being their own boss, having fun and making their own money? Mobile wasn’t new, software wasn’t new—and yet the App Store created something new that has changed the course of many, many people’s lives. A similar revolution is now possible for new businesses to sell their content/service on a continuous basis as micro-subscriptions.

One of the really surprising things that emerged naturally in the App Store was the extremely low prices. Of Apple’s own strategy to sell devices, Steve Jobs said at the D8 conference:

“Price aggressively and go for volume. That worked for us.”

What’s amazing is, that strategy is now available not just to big corporations, but to individuals working in their underpants at home. Many, many developers are earning steady income from sales of their $0.99 apps.

But one thing about this phenomenon had troubled me: iOS apps are a one-time sale. Because of the lack of upgrade pricing in the App Store, developers face a market saturation problem. All their revenue comes from new customers only, who find their app through word-of-mouth, reviews, and search results. But if you have sold your app already to everyone in your target demographic, the revenue stream would theoretically stop. You have to either do the Tweetie 2 thing and release a new app (and deal with all the consequences of that), or expand your product line by developing other apps.

In-app purchases may have helped a little to improve the situation, but there’s a psychological barrier that must be overcome every time the user is presented with a “Buy now” button. With both IAP and App Store purchases, the developer must overcome that barrier every time to get paid. But with subscriptions, they only need to overcome it once to produce a steady stream of income. That’s huge.

Think of it this way: when a person buys a mobile phone, they see two prices - the price of the phone, and the monthly plan price. But how many people multiply the monthly plan price by the length of the contract, as part of their purchase decision? There is a very low psychological barrier to recurring payments. So, if you have valuable content to deliver to your users via an iOS subscription app, you could price it at $0.99/month or even $0.09/month and build your business based on a steady, predictable income flow.

For some, that may turn out to be the last incentive they need to quit a job they hate and strike out on their own.

After only 1 day playing with my iPad, it’s clear that the “beautiful” apps own this space. I’m sure we will see the same deluge of fart apps and just plain ugly apps that we have on the iPhone, but on iPad, the really gorgeous UIs stand out more than they do on iPhone. And with the higher price tags that for now seem to be the norm, users will expect more and demand better.

But “beauty” is not a requirement to publish apps on iPad, it’s an impulse—an irresistible urge. To me at least, it seems that if you give some people a canvas, they cannot help themselves but create art.

Take TV advertising as an example. The job is simply to tell people about your product, and how they can get it, within the time constraints imposed by the platform. But many ads on TV stand up on their own (without the product) as beautiful art. It’s a similar story for printed ads, buildings, built-in computer alert sounds, business cards—basically any human activity where discretion is allowed. People are addicted to their own creativity, and everybody benefits.

I wrote before that Apple gave iPhone OS developers a forced lesson in UI minimalism. And now there is no excuse for getting it wrong on iPad. There are oodles of pixels to work with, plenty of grunt to push them with, and a big reservoir of power in its twin batteries. To help even more, the typical iPad usage session is many multiples of the iPhone. You have the full attention of a comfortably seated, wide-eyed audience.

Better give them art.

- posted from my iPad

(originally posted here)